Omnicom Group Inc.'s (OMC) fourth-quarter net income fell 14%
amid a decline in advertising spending as companies cut back on
marketing in the wake of falling sales.
The advertising and marketing-services giant cut loose almost 5%
of its 70,000 employees in 2008, and more pink slips are expected
in the industry this year amid expectations that advertising
spending will continue to weaken this year amid sharp pullbacks
from big marketing spenders such as auto makers.
However, Omnicom's clients include companies that have been
holding up better than the most amid the recession, such as
consumer goods maker Procter & Gamble Co. (PG), fast-food
restaurant chain McDonald's Corp. (MCD) and brewer Anheuser-Busch
InBev (ABI.BT).
The holding company, whose agencies include TBWA Worldwide Inc.
and BBDO Worldwide Inc., and which runs neck and neck with WPP PLC
(WPPGY) as the world's largest owner of advertising and marketing
agencies by revenue, reported fourth quarter net income fell to
$271 million, or 88 cents a share from $313.9 million, or 96 cents
a share a year earlier.
Revenue fell7% to $3.37 billion.
Analysts' mean estimates were for per-share earnings of 84 cents
on revenue of $3.37 billion, according to a poll by Thomson
Reuters.
In the U.S., revenue fell 4.7% to $1.76 billion, while
international revenue dropped 9.5% to $1.78 billion as the dollar
strengthened.
Operating margin rose to 13.3% from 14.7%.
Shares of Omnicom closed Monday at $28.11 and didn't trade
premarket.
-By Veronica Dagher, Dow Jones Newswires; 201-938-5400;
veronica.dagher@dowjones.com
-By Tess Stynes, Dow Jones Newswires; 201-938-2473;
tess.stynes@dowjones.com